by Jennifer A Dlouhy and Mario Parker (Bloomberg) Biofuel mandate overhaul mulled by Congress after bankruptcy; Unions and Pennsylvania politicians seek immediate action — The bankruptcy of Philadelphia Energy Solutions LLC, the biggest refiner on the U.S. East Coast, has invigorated efforts to overhaul a 13-year-old federal program promoting biofuels that has drawn bitter criticism from the oil industry.

Senator John Cornyn, a Republican from Texas, is drafting legislation that aims to stem compliance costs for refiners while encouraging the construction of storage tanks and blender pumps needed to get more biofuel into cars. Separately, fellow Texas Republican Senator Ted Cruz is mulling other changes that Trump’s Environmental Protection Agency could adopt administratively.

The efforts represent the best chance at overhauling the Renewable Fuel Standard since it was created by Congress in 2005. They also could resolve a political headache for President Donald Trump, since the current program forces him to choose between two important political constituencies: Iowa farmers growing corn for ethanol and Pennsylvania laborers who toil in the state’s four oil refineries.

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Biofuel backers counter that current policy isn’t to blame for the PES bankruptcy. Opponents of the biofuel industry are “trying to capitalize on one company’s failed business model,” said Bob Dinneen, president of the Renewable Fuels Association, a Washington-based trade group. It’s disingenuous “to hold this up as the poster child for the RFS.”

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Trump’s former regulatory adviser, Carl Icahn, pushed for changes to the RFS program that the billionaire called “rigged.”

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Cornyn’s legislative draft, still being developed as of Wednesday, includes some elements advanced by Marathon Petroleum Corp.

Separately, Cruz is considering policy changes that EPA could implement administratively. Among the possible options: EPA selling its own credits for when RIN prices reach established price ceilings, with revenue earmarked for construction of new infrastructure to get more biofuel to the market.

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Both efforts could be pared with sweeteners for the biofuel industry, including a policy change to allow gasoline containing 15 percent ethanol to be sold year-round.

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Another challenge: The oil industry itself is divided over the best solution.

While some independent refiners are eager to keep RIN prices in check, the effort is quietly being fought by other companies that produce and refine crude and make money selling the compliance credits.

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Grassley (Senator Charles Grassley (R-IA)) offered a dim view of the RFS reform effort Tuesday, telling reporters on a conference call that there is no need for legislation and signaling his concern about any cap on RIN prices: “It’s pretty clear what that would do to the industry.”

And some biofuel industry champions are bluntly warning Trump of political consequences in the Midwest. “Of course Pennsylvania is an important political state and you have to be careful,” said Brooke Coleman, director of the Advanced Biofuels Business Council. But it’d be a mistake “to put your party on the wrong side of an industry that’s absolutely crucial to agriculture, from farms to tractors.” READ MORE